Customers have withdrawn $200 billion worth of deposits from American banking giant JPMorgan in the last year as the bank deals with a long list of fines, losses and scandals.
JPMorgan’s latest earnings presentation for Q2 of this year shows that excluding deposits from First Republic Bank, which the bank acquired last year, deposits were down year-on-year to $2.3 trillion compared to $2.5 trillion.
The dip in deposits comes amid the release of a Gallup poll, which echoed similar surveys from 2008 before the Great Financial Crisis, that found nearly half of Americans are now concerned about the funds they keep in banks or other financial institutions.
“After several recent high-profile bank failures in the U.S., about half of Americans are concerned about the safety of the money they have in banks or other financial institutions.
This is on par with the level of worry measured during the financial crisis in 2008 when financial institutions previously believed to be ‘too big to fail’ collapsed.”
In JPM’s earnings report, CEO Jamie Dimon, a staunch critic of Bitcoin (BTC) and cryptocurrency, said that one potential risks that the bank was facing was that customers are burning away their cash buffers amid soaring inflation and much higher interest rates.
“There are still salient risks in the immediate view, many of which I have written about over the past year.
Consumers are slowly using up their cash buffers, core inflation has been stubbornly high (increasing the risk that interest rates go higher, and stay higher for longer), quantitative tightening of this scale has never occurred, fiscal deficits are large, and the war in Ukraine continues, which in addition to the huge humanitarian crisis for Ukrainians, has large potential effects on geopolitics and the global economy.”
Despite the deposit flight, JPMorgan’s profit margins are soaring.
The company just reported a 67% rise in quarterly profits to $14.47 billion in the quarter ended June 30th.